Irregular state expenditure jumps 62%

Government spent R26,4-billion in 2010 in ways that contravened laws and regulations, BusinessDay reports.

The national and provincial governments and their entities notched up R21-billion in irregular expenditure last year, a 62% rise over the previous year’s R13-billion, with unauthorised expenditure adding a further R3,8-billion (R8,9-billion), and fruitless and wasteful expenditure an extra R1,5-billion (R500-million).

The Department of Health on its own contributed R5-billion, or 25%, of the R21-billion in irregular spending.

There were no clean audits in the big-spending departments of health, education and public works, which showed a deterioration in their financial management.

The deterioration was "disappointing", Scopa chairman Themba Godi said, especially in light of the considerable efforts to improve matters. "It is a worry that we are not making as fast and as good progress as we would want," he said.

"They need to jack up their act and act with a sense of urgency, firmness and decisiveness."

Accountant-general Freeman Nomvalo countered that there had been strong improvements in some departments, such as the Department of Home Affairs and the Department of Correctional Services, with the overall outcome "patchy" rather than a deterioration.

A sign of the deterioration at national level was that of the 39 departments only 8% received unqualified audits or "clean" opinions with no findings, a progressive decline from 16% in 2008-09 and 12% in 2009-10.

Three percent received a disclaimer or adverse opinion for the first time in three years.

The Department of Environmental Affairs, Department of Public Enterprises and Department of Science and Technology were the stars, all getting clean audits.

On the other hand, 67% of national departments received unqualified audit reports with findings relating to the weaknesses in their internal controls and financial management systems, compared with 53% in 2009-10 and 42% in 2008-09. Qualified audit reports declined over the last three years, from 42% to 22% last year.

Provincial departments showed a decline in disclaimers and adverse opinions from 8% in 2008 -09 to 4% last year. Unqualified reports with no findings declined from 17% to 13% in this period, while unqualified reports with findings dropped to 55% from 56%. Qualified audit reports rose to 28%, from 19% the previous year.

Scopa heard that the Department of Defence had gone a long way in improving its financial management, though the Department of Water Affairs faced "enormous challenges" with regard to the water trading entity. Departments which received worse audit opinions than last year were the Department of Traditional Affairs, Department of Health and Department of Public Works, which received a disclaimer.

Democratic Alliance spokesman on public accounts Anchen Dreyer called on President Jacob Zuma to take "appropriate action" against the offending accounting officers and recover money wherever possible. She said financial management at national level had worsened.

BusinessDay

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